The median sales price of traditional homes (excluding foreclosures and short sales) in January was $198,000, down 7.9 percent from a year ago. Lender-mediated properties posted a January figure of $125,000, an increase of 3.3 percent from a year ago. There were 2,736 signed purchase agreements in January, a dip of 3.2 percent from a year ago.
That's the second consecutive month of year-over-year decline in pending sales, though the declines have been small to this point.
The Federal Home Buyer Tax Credit and extremely low mortgage rates have been the two main drivers of the market's recent momentum and, unfortunately, both of those market boosters may be near their eventual end.
The tax credit expires on April 30 and likely will not be extended. Further, the Federal Reserve intends to stop buying mortgage-backed securities in the near future, a move that will likely lead to an increase in mortgage rates. Unless these changes are effectively offset by other economic improvements, we can expect downward pressure on home sales in the months ahead.
"A lot of progress has been made in the last year," said MAAR President-Elect, Pat Paulson. "But the recovery process still isn't over. There are going to be some more bumps in the road."
Make sure you find out more about the down payment assistance being offered in Minneapolis, St Paul, Hennepin County, Ramsey County, and Dakota County. These programs will be incredible resources for our clients now and only more important after the tax credit expires.
Hey Realtors...Let's see what we can do together!
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